Lost commission revenue the main worry for half of all agents
Lost commission revenue is the main worry for half of all agents in Western Europe, according to an Amadeus poll.
A third of travel agents say commission cuts are the “number one” challenge they face.
The findings came as the company released a research paper offering advice on how travel agencies can maximise service fee revenue.
The “Service Fees and Commission Cuts: Opportunities and Best Practices for Travel Agencies” white paper offers a history of the demise of airline commissions over the past decade.
The report reveals results of an Amadeus survey which found that 34% of travel agencies said reduced revenue from commissions was the number one challenge facing their business. In Western Europe, lost commission revenue is the number-one worry for half of all travel agents.
In the second half of the paper, experience is drawn from markets which have successfully implemented service fee models to compensate for the loss in revenue.
The most successful markets have seen their revenues grow even as commissions have fallen, Amadeus claims.
“Travel agencies adopting a service fee model charge the customer for services provided instead of receiving a commission from the travel supplier. Scandinavia and the US have been particularly advanced in this respect,” it said.
The report offers tips to travel agencies wanting to implement a successful service fee model:
· Educate staff and travel agents with formal training programs on service-fee schemes and high margin products.
· Communicate service fees to customers up-front; inform them of the new service fee business model. Research suggests that customers are willing to pay for a service they see value in.
· Automate processes for charging fees to avoid errors and increase travel agents’ efficiency and productivity.
· Identify the services for which customers see the highest value and are willing to pay for. The top five identified by the study are trip planning, hotel-only bookings, special coupons, cruises and frequent flyer reservations.
Travel office products and solutions vice-president Claude Giaferri said: “We feel we can add value by sharing our experience of markets and travel agencies which have successfully implemented new business models to help those who have yet to go through that transition. That is what we hope to achieve with this white paper.”
by Phil Davies
Phil Davies
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